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article imageRussian firms tone down holiday cheer as crisis bites

By Germain Moyon (AFP)     Dec 26, 2015 in World

Forget corporate holiday bashes where glitterati are treated to fine champagne and French delicacies: Russia's economic crisis has taken the glow off the holiday season this year.

Many companies are now forced to scrimp on once-lavish New Year's parties or celebrate the country's most beloved holiday in the office -- with simple snacks on offer and employees bringing their own drinks.

On a recent afternoon servers were arranging Chianti bottles on white tablecloths for a holiday party for 500 employees of an international firm in Roll Hall, a venue just south of the Moscow city centre.

Yelena Vetrova, deputy director of the entertainment and shopping complex, said that business was mostly good, although some clients waited until the last minute to book their parties, while others scaled theirs down.

"For the first time ever this year we were taking reservations in December," said Vetrova, noting that clients used to make bookings as early as May.

She added that some clients had cancelled, while others toned down the festivities: the average price tag this year is 25 to 30 percent lower than last December.

"People don't go away hungry but they don't eat foie gras," she said with a wry smile.

"Many firms ask us whether they can bring their own alcohol, and we agree."

- Modesty in vogue -

Corporate New Year's parties became a huge industry in Russia during the years of high oil prices, with some companies booking lodges in the Alps, splurging on chocolate fondue fountains and paying singers hundreds of thousands of dollars for a performance.

But if it was once trendy to show off, the opposite appears to be true amid a shrinking economy, with prices rising and real incomes falling by more than nine percent in the first 11 months of 2015.

This year, holiday excesses can land businesses in hot water.

Anatoly Chubais (R) of the nanotech company Rosnano  pictured October 31  2013 with Russian Prime Mi...
Anatoly Chubais (R) of the nanotech company Rosnano, pictured October 31, 2013 with Russian Prime Minister Dmitry Medvedev (3rd L) and his French and Finnish counterparts, drew suspicion and government scrutiny with a lavish 2015 holiday party
Alexander Astafyev, RIA NOVOSTI/AFP

The government is looking into what many believe is a suspiciously lavish banquet laid on recently by the state corporation Rosnano, a leader in Russia's nanotechnology industry.

Some 400 people attended the New Year's party, which reportedly cost more than $30,000 (28,000 euros).

"We have a huge amount of money. Simply a lot," Rosnano head Anatoly Chubais told his staff at the event held at a Moscow club, according to a leaked video that caused a scandal.

"We will have a second bonus," he said, to cries of "hooray!"

Chubais, one of a handful of figures who oversaw liberal reforms in the government of Boris Yeltsin and who managed to hold on to a top post under President Vladimir Putin, was forced to explain himself.

"About the New Year's corporate party," he wrote on Twitter on Wednesday. "I confirm that all expenses were paid from the personal funds of board members."

The scandal prompted Deputy Prime Minister Arkady Dvorkovich to order a check into whether the Rosnano employees' bonuses were justified.

- Partying in the office -

For most companies in the private sector, New Year's habits are hard to break, with three-quarters planning to have a party.

Even the weather is unusual in Moscow this holiday season  with temperatures in Red Square reaching ...
Even the weather is unusual in Moscow this holiday season, with temperatures in Red Square reaching highs of 9 degrees Celsius (48 Fahrenheit) during the runup to Christmas
Vasily Maximov, AFP/File

But 41 percent said they have cut their budgets and 21 percent plan to party in the office, according to a study by the Russian executive search website

"The situation is not good," said Yegor Dobrogorsky, the head of event agency Communicator Creative Events, according to which the hard-hit construction and auto sectors appear to be scrimping the most.

Dobrogorsky added that companies can save by having employees host and participate in entertainment programmes, opting for buffet-style meals or axing the traditional celebrations altogether.

Buying Russian wines instead of imported alcohol can reduce the bill by half or more, he added.

Restaurateurs for whom New Year's parties have always been a gold mine are taking a hit.

Igor Bukharov, president of the Russian Federation of Restaurateurs and Hoteliers, said the market for holiday catering is down by a further 20 percent after last year's decline.

The parties "have always been an important source of revenue to compensate for a slow January," he said.

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